Memorandum by ASLEF (PRF 40)
PASSENGER RAIL FRANCHISING
ASLEF welcomes the opportunity to submit evidence
about passenger rail refranchising to the Transport, Local Government
and the Regions sub-committee.
Decisions about franchising and refranchising
are, of courses, made in the context of a profoundly fragmented
railway, the legacy of what is now almost universally regarded
as one of the most ill conceived privatisations in history. It
is not possible to address the nature of franchises, the identity
of franchises and the terms on which they operate in isolation
from general government policy on transport and other factors
facing the industry.
Nevertheless, the question of franchising is
of the greatest importance to ASLEF and its members. Train Operating
Companies (TOCs) employ the great majority of our 16,200 members
who are, in turn, the vast majority of train drivers employed
in Britain today.
It has been and remains ASLEF's contention that
privatisation has been a disaster for Britain's railways and that
no aspect of the industry can be addressed without acknowledging
this fact. We hold the view, shared by the great majority of the
public, that there is an urgent need to restore a publicly-owned
and publicly-accountable railway which can ensure that the government
gets value for money invested in it and that the public is assured
of the safe, integrated and efficient service it is denied at
Since the 2001 General Election there has been
a deterioration in many aspects of the industry. Railtrack's finances
are an increasing concern, there is a vacuum of leadership at
the Strategic Rail Authority, long-term refranchising has effectively
been haltedand the actual railway service is, in the view
of the Rail passengers Council, the worst Britain has seen in
It is in that context that we submit our views
on the refranchising process, industrial relations and the new
guidance issued to the Strategic Rail Authority. Our aim, as ever,
is to secure the best possible development of the railway industry
in the interests of the public, and the best possible conditions
for our own members within it.
Industrial relations in the industry are indeed
in need of a radical improvement. At the time of privatisation,
the attitude that staff were a liability to be slimmed down as
far and as fast as possible took deep root. Many managers with
railway experience left the industry, and new managers at many
of the TOCs had an attitude towards industrial relations shaped
in other industries.
It has been a long struggle, in some cases,
to prevail upon managers to treat their employeestrain
drivers, in our casewith respect. The culture inculcated
by privatisation of pursuit of short-term profit has often taken
its toll on industrial relations. There are further, specific,
problems which have arisen however and which need consideration
in the context of franchising and refranchising. One of these
is the drive to get train drivers to work longer hours, rest days
etc. This is rooted in the fact that many franchises slimmed down
their driving staff to below the level necessary to meet timetable
Some managers find it cheaper to encourage drivers
to work over-long hours rather than to recruit the required number
of new staff. This, of course, has public safety as well as industrial
"Increased efficiency gains have only been
achieved through overtime and increased workload created by a
significant reduction of employment in the sector"
ASLEF believes that the statutory regulations
of train drivers hours is long overdue. It is an anomaly that
the hours of PSV and HGV drivers are, correctly, regulated by
law, but those of train drivers are not. Driver fatigue can, under
some circumstances, be a contributory factor in safety lapses.
While the industry has agreed to a basic 35-hour week under pressure
from ASLEF, rest day and overtime working, driven from the drivers'
side by the need to secure more pay and from the employers side
by the desire to minimise the headcount, remains a bane in the
industry. In some cases, the pressure on drivers to work extra
shifts has led to a serious poisoning of the industrial relations
environment. ASLEF hopes to see legislation introduced to address
the issue of train drivers' working time.
Fragmentation has play a part here, too. Train
drivers are now in an environment where, in all major and many
minor centres, several TOCs or freight operating companies are
competing to employ them. There is therefore obviously a tendency
for trained drivers to gravitate towards the highest-paying company
operating in their area, although factors other than pay do, of
course, play a part. This, in turn, means that some TOCs are having
to continually recruit and train new drivers just to stand still,
and shortages may in some cases persist in spite of the best efforts
of management. This is, in our view, the root of the problems
presently facing Arriva Trains Northern, for example.
We must also note that some industrial relations
problems are simply caused by incompetent or authoritarian management,
the product in part of the introduction of both senior personnel
with little understanding of the railway and of the need to maximise
shareholder return in a short period of time. The abuse of disciplinary
procedures, unwillingness to honour signed agreements and petty
harassment of drivers are all-too common in all-too many franchises.
There are, of course, more positive examples
to be highlighted. Some companies are attempting to build better
relations with employeesGNER for example. Last year saw
the introduction of the Professional Driving Agreement, which
in the words of GNER's Human Resources Director, Mike Goodies,
"laid down the foundation for a new era in the relationship
between GNER and its Train Drivers".
Drivers in GNER have attained professional occupational
status with joint forums to review agreements and a partnership
approach developing professional non-adversarial relationships
based on honesty, integrity and loyalty. ASLEF would like to see
this practice become more widespread.
To address some of these problems, ASLEF has
proposed a return to national standards of pay, conditions and
training for all train drivers, as pertained under British Rail.
This would involve, in all respects, a progressive "levelling-up"
towards best practice. Such an approach would ensure the highest
standards both of driver training and industrial relations. To
date, however, the Association of Train Operating Companies and
its members have been unwilling to countenance such proposals,
even in respect of training. It remains our view, however, that
only a return to national standards will reduce the industrial
relations difficulties, periodic driver shortages and excessive
overtime working which bedevil the industry at present.
In the context of refranchising, it is our view
that the industrial relations conduct and performance of Train
Operating Companies and other franchise bidders should be taken
into account, the more so since shortcomings in this respect directly
impact on the ability of a TOC to meet its service obligation
The franchising and re-franchising process create
a climate of uncertainty for employees in Train Operating Companiesfor
train drivers in particular. This is especially the case when
the franchise map is being continually redrawn. Drivers in a given
depot may find themselves moved to another franchise, or even
divided and re-divided between several franchises.
This means new colleagues, new managers, new
rosters and, often, a requirement to learn new routes. Shunting
employees around from one company to another, with changes of
uniform and corporate branding, like so many freight wagons, is
not conducive to high morale or efficient working. It is our view
that insufficient weight has been given to these factors by the
SRA in its rather cavalier approach to redrawing the franchise
The recent government decision to extent all
franchises by two years, and to effectively suspend the long-term
refranchising process may be understandable in the context of
the overall disarray of the privatised industry since the Hatfield
crash one year ago. But this should not allow us to forget that
the refranchising process was already in chaos before the decision
of the Secretary of State. One franchise after another had hit
problems due to either unsatisfactory bids, the impossibility
of Railtrack delivering on its commitments in relation to the
infrastructure, monopoly concerns and other factors.
It is our view that whenever the process of
long-term refranchising starts (and this is theoretically essential
if investment in TOCs and new rolling stock is to be assured)
most of these problems will remain. They are embedded in the structure
of the industry, in particular in the separation of track from
wheel, of infrastructure from train operations. They are exacerbated
by the failure of the Strategic Rail Authorityor anyone
elseto formulate an overall vision or plan for the development
of the network, or even to give leadership in dealing with immediate
ASLEF has developed its criticisms of the SRA
in its response to the new draft guidance issued by the government.
These points are summarised here.
We believe that the role of the SRA has failed
in the objectives set before it by government at the time of its
Its leadership performance in the early franchising
period lacked focus and co-ordination with the net result that
the refranchising has yet to deliver a single benefit to rail
customers'. Likewise the SRA's long awaited strategic plan for
the industry has fallen considerably behind schedule.
It is our belief that the structure of the profit-led
industry did not allow for clear strategic guidance, and at every
turn the SRA found its intentions confounded by the interests
of separate, powerful interests owing their main obligations to
their own shareholders.
We believe that the fragmented privatised industry
did not allow for the SRA to impose co-operation between structuresrather,
the mechanisms at the SRA's disposal only allowed for minimal
influence. A view has developed that the "SRA's approach
. . . is just a matter of asking operators what they want and
calling the result a strategy".
The SRA's statutory powers over the privatised
industry do not provide necessary weight to direct companies whose
commercial incentives quite often preclude the collaboration and
co-ordination that is vital for the industry to function effectively.
It was the intention of the government that the SRA would take
a commanding role by introducing strategy, planning and co-ordination
but the market forces introduced by privatisation have confounded
this intention. Without an industry-wide restructuring, the SRA's
position lack substance and no decision it takes in relation to
refranchising are likely to have significant positive outcomes.
ASLEF, and the industry as a whole, welcomed
the Governments 10-year plan and the associated investment. At
the time it seemed that the years of financial starvation had
come to an end. However, very serious question marks have since
arisen over the viability of the plan.
The £60bn of rail investment assumed investment
from the private sector worth £34bn. Most commentators now
accept that the private sector will find difficulty in attaining
this figure, given the overall state of the industry, which is
not an attractive one for investors. The financial situation on
which the plans were based, has seriously deteriorated with Railtrack's
share price collapse and the dramatic escalation in costs for
the WCML and ECML upgrades. The CBI has cast doubt on the ability
to deliver the 10-Year plan and Sir Alastair Morton, outgoing
Chairman of the SRA, has warned that it "might take 15
years before Britain enjoyed a modern rail network unless the
government poured in billions of pounds of extra subsidy".
The past twelve months have seen the present
system allow for financial wastage through the recycling of public
money. Train Operators receive a subsidy from the Treasury, which
is paid to Railtrack for access charges. Railtrack receives fines
from the Rail Regulator, which is paid back to the Treasury. Train
Operators claim compensation from Railtrack, Railtrack pleads
to the Treasury for extra financial assistance. The whole system
resembles a giant money-laundering racket in which the only people
not inconvenienced at all are the shareholders of the private
firms involved, Railtrack above all.
It is our contention that rebuilding the railway
the nation needs will depend primarily on government investment.
That has been the universal experience of other countries, with
more efficient railways. It also reflects the nature of the railways,
which we believe are a social good unsuited to direction by profit
and market criteria. Indeed, government investment is already
the backbone of the finances of Railtrack and, directly or indirectly,
many TOCs. Total net subsidy payments to TOCs in 1999-2000 amounted
to over £1bn. The problem at present is that the taxpayer
is seeing very little ion return for this investment. Given the
present structure of the industry, much of the money is wasted,
handed over to shareholders, lawyers, consultants or recycled
in fines, subsidies and charges as described above.
No consideration of the issues raised in the
committees terms of reference for this inquiry can be complete
without a particular examination of Railtrack. It absorbs most
of the investment, yet emerges as the main obstacle to either
a restructuring of the industry or of any residual hope that the
existing structure, with its emphasis on refranchising, could
be made to work.
It is a concern for ASLEF that Railtrack is
consuming large quantities of the planed 10-year budget. In the
aftermath of the tragic incident at Hatfield, Railtrack immediately
raised its dividend to shareholders. As its share price collapsed
and it sought a £1.5 billion advance from the taxpayer, it
on the same day paid a further £150 million to its shareholders.
Not to labour the point, this is, in our view, entirely unacceptable
conduct which should have met with a firmer response from government.
The company is seeking a further £2bn to help finance safety
works and is also expected to receive an extra £497 m of
taxpayers money in the next five years after the rail regulator
proposed to halve the charges freight operators pay the company.
Each year Railtrack produces its Network Management
Statement (NMS) that outlines its plans for the management of
railways in Great Britain. It has been argued that in the absence
of the SRA's plan, the NMS is the nearest thing to a strategic
overview for the industry.
In the NMS 2000 document, Railtrack envisaged a year on year reduction
of investment in the rail infrastructure for 2004-05 to 2010-11.
Of course the argument would be "as items are changed the
need to spend on renewals would diminish", not so. The statement
said that the growth of traffic on the network has increased and
that the ". . . increase demand in terms of train kms of
tonnage, could result in the worsening of other measures".
Railtrack's general policy for structures is to "maintain
rather than renew" and similarly in signalling using
what is called "optimising whole-life costing"
(saving made through extending the life of an item beyond its
Railtrack inserted in the statement that their
"current expenditure plans are . . . subject to the outcome
of the periodic review of access charges". Railtrack
failed the industry, which is to provide a manifesto of strategic
development the rail industry needs, in reality the 2000 NMS became
a political statement.
The 2001 NMS fared no better with Tom Winsor
replying to the document as "profoundly unsatisfactory".
The Rail Regulator went on to say that the NMS was "not
useful, with a considerable gap between what is and what it should
be" . . . in short, it was "too vague with too
many fine words but little substance".
We agree with the Transport Select Committee's
observation that Railtrack has presided over a deterioration in
track standards and agree with the comments of the Rail Regulator
that "Railtrack has not maintained and renewed the network
to a standard, which could reasonably be expected of it. Its past
record is . . . not acceptable".
Quite simply Railtrack operates a system whereby it is unable
to cope ". . . when management, ownership and operation
are divided between numerous uncooperative institutions with drifting
lines of authorityRailtrack, the operating companies, the
strategic rail authority. The Transport Department, the franchising
director, the Railways Inspectorate and so on".
The former Chief Executive of Railtrack, Gerald
Corbett said in August 2001 that: "I am afraid there will
be another train crash and that will explode the whole thing again.
The problem is the way the Railway was privatised, the fragmentation,
the adversarial contracts. There is a reason why most railways
in the world are integrated: it is that they are easier to manage
. . . splitting into all these different bits and particularly
splitting the wheel from the rail has made it a managerial nightmare".
If Mr Corbett is rightand we must hope
that he is not, he has been wrong about many thingsand
there is a further major accident attributable to the fragmentation
or profit motive introduced by privatisationthen it is
our view that the public will this time rightly hold politicians
accountable for a failure to act on the vast and ever-accumulating
evidence that railway privatisation has failed every conceivable
test of efficiency, value, development and, above all, safety.
Our view is that any sober, non-ideological
assessment of the state of the railways is that change is long
overdue. Nothing that has been announced by the government since
the general election yet rises to the scale of the problems. As
stated above, our view, shared by most of the public, is that
a return to some form of public ownershiphere we are not
prescriptiveis overdue. Privatisation has, in the case
of this industry, clearly failed, and only a return to public
ownership can provide the foundation for re-integrating the fragmented
railway into one operation.
ASLEF does not hold the view that there is no
role at all for the private sector in the railways. Particularly
where major projects are concerned, it would not be feasible for
a publicly-run industry to retain all the necessary skills and
resources in-house. Buying in private sector help would be perfectly
normal. However, the evidence of major projects to date, from
the CTRL to the WCML clearly indicate that leaving it to the free
market is a guarantee that nothing will be doneor at least
nothing on budget and on time.
It now seems clear that there can be no strategy
for the renewal of the industry, nor even an efficient refranchising
process, while the railway infrastructure remains so grossly mismanaged.
It is also more obvious than ever that the fragmentation of the
industry, and the substitution of the profit culture for the public
service ethos have done damage which cannot be reversed while
the industry remains structured as it is.
Our view is that Railtrack should be restored
to public ownership as a matter of urgency, and that its maintenance
and infrastructure work should be reintegrated, ending the present
system of sub- and sub-sub- contracting which Lord Cullen, amongst
others, has been so critical of. With that accomplished, the SRA
could, on the basis of discussion and strategic planning, propose
the progressive reintegration of the entire industry, including
passenger service operation, in some publicly-accountable format.
We hope that the Committee will give due weight
to our opinions, since they are of those who; live and work in
our industry. We are, once again grateful for the chance to have
M D Rix
15 Public Transport. Trials and Tribulations' Pub:
FNV Bondgenoten, The Netherlands. October 2000. Dutch Ministry
of Social Affairs and Employment commissioning of a survey into
the effects of the introduction of market forces on the working
conditions, conditions of employment and job security of employees.
The studies where conducted in Sweden, Denmark, Great Britain
and France. Interviews were carried out with authorities, private
companies and trade unions (ASLEF & T&G UK) in private
and public transport sector. Back
Shaw, Dr John, The role of rail in Britain's 10-year transport
strategy. June 2000. Back
The Independent: "Byers and Morton square up as CBI
attacks 10-year plan for transport". 16 July 2001. Back
Shaw, Dr John, The role of rail in Britain's 10-year transport
strategy. June 2000. Back
Railtrack NMS 2000. Back
The Independent "MPs want Railtrack back under government
control" 30 March 2001. Back
30 November 2000, The Times-"Why Blair is making
Major Railway errors" (A. Kaletsky). Back
Sunday Times 19 August 2001. Back